Min-Max Planning

Min-Max Planning determines the size and timing of item replenishment orders and creates a purchase order/move order to replenish items stock. This purchase order/move order to restock items is created based upon the Min-Max Planning report. The planning report provides the item and quantity to be ordered or manufactured. Items are required to be restocked when the quantity of an item in stock is fewer than the quantity required by the inventory organization. It maintains inventory stock levels for all of your items or selected items. With min-max planning, you specify minimum and maximum inventory levels for your items and minimum and maximum order quantity. You can also specify fixed lot multiplier. When the inventory level for an item (on-hand quantities plus quantities on order) goes down below the minimum quantity prescribed by you, Oracle Inventory module suggests a new purchase requisition, internal requisition, move order, or a manufacturing job to bring the balance back up to the maximum quantity mentioned by you. Inventory module performs min-max planning for your items at either the organization level or the subinventory level. You can choose this level when you run min- max planning report.

When you min-max plan at the organization level, you can optionally include the following transactions as demand quantity in the min-max planning calculation
a) unreserved sales orders
b) reserved sales orders
c) account issue move orders
d) work in process component requirements

This creates Purchase requisitions or internal requisitions for buy items and WIP unreleased jobs for make items for the suggested replenishment quantities. You can then turn these requisitions into purchase orders or internal orders and the unreleased jobs into released jobs for the required items. If a revision is specified when a purchase order requisition is created for revision controlled items, it is controlled by setting of the profile option INV: Purchasing by Revision

When you min-max plan at the subinventory level, you can optionally include only unreserved sales orders, reserved sales orders, account issue move orders, and subinventory transfer move orders as demand quantity in the min-max planning calculation. Subinventory level planning cannot generate jobs for WIP and does not consider WIP jobs as supply or WIP components as demand. Purchase requisitions, internal requisitions, or pre-approved move orders for the suggested replenishment quantities can be optionally created. You can then turn requisitions into purchase orders or internal orders for the required items. Sourcing Rule does not work with Min-Max Planning.

Which are different Inventory Planning methods?

Which are different Inventory Planning methods?

There are 5 inventory Planning methods as mentioned below:
1) Subinventory Replenishment planning
2) Min-max planning
3) Re-order point planning
4) Kanban planning
5) Periodic Automatic Replenishment(PAR)

Subinventory Replenishment planning

Oracle Inventory provides additional methods for planning and replenishing inventories. Even if you are not maintaining perpetual on-hand balances in non-tracked subinventories, for example-you can use the replenishment counting system to plan your inventories. This may be ideal for replenishing free stock items that you store on the production floor, or office supplies kept in departmental cabinets. Oracle Inventory even provides an open interface for loading replenishment count data collected electronically, such as with a hand held bar code reader.

Replenishment Counting Tracked Subinventories
In some situations, you may want to do your own planning and use Oracle Inventory
to create your internal requisitions. When using the replenishment system in this
manner, you provide the system with one of the following pieces of information (in
addition to the item and subinventory):
• Order quantity. You specify the quantity that is to be ordered.
• Order maximum quantity. Oracle Inventory orders the min-max maximum quantity.
You can manually enter this information in the Replenishment Counts window or through an external interface, using the replenishment interface tables

Replenishment Counting Non-Tracked Subinventories
Planning and replenishment of non-quantity-tracked subinventories is different because Oracle Inventory cannot use perpetual system quantities. As you issue items from a subinventory without formal issuing procedures, it is necessary to take inventory of non-tracked subinventories to record item usage and determine reorder necessity.

In order to determine when and how much to replenish, you periodically physically count the items in non-tracked sub inventory. Here also you can enter the count details through batch load transaction such as bar code reader or manually by navigation. Inventory module permits on hand quantity as an additional replenishment information type for non-tracked subinventories.

Planning Levels
You can only use the replenishment counting system at the subinventory level. To use
replenishment counting, you must set up item-subinventory relationships using the Item Subinventories or Subinventory Items windows.

'Push' and 'Pull' systems of controlling resources in Inventory planning

'Push' and 'Pull' systems of controlling resources in Inventory planning

The push system pushes the resources in to manufacturing based on resource planning. It is also more commonly known as the Materials Requirements Planning (MRP) system. This system is based on the Planning Department setting up a long-term production schedule which is then analysed to give a detailed production schedule for making or buying parts. This detailed schedule then pushes the operations team to make or purchase a part and push it forward to the next work station. The biggest weakness of this system is that it is based on guessing/forecasting the future customer product demand to develop the production schedule that production is based on and estimating the time it takes to produce each part. Over-estimation and under-estimation may lead to excess inventory quantity or part shortages, respectively.

A Pull system is a method of controlling the flow of resources in which replacement of products is based on consumption of the item quantity. A pull system is completely based on customer product demand. Whatever is consumed is only ordered on sources of supply. Since here the resources are pulled from the supply sources, it is called 'Pull' system. A Kanban system of Inventory planning is a Pull system that uses color-coded cards attached to parts or part containers to regulate the upstream production and delivery flow.